Oman Set For Huge Petroleum Storage Capacity Expansion
Oman is looking to establish a new 200mn barrel capacity crude oil and refined products storage depot at Duqm, on the sultanate�s southeastern coast.�
Speaking at the launch of The Oil and Gas Year Oman 2012 publication on 23 September, Oman�s Oil and Gas Ministry Under-Secretary Nasir al-Jashmi revealed that officials at state-controlled Oman Oil Company (OOC) were in the process of assessing the feasibility of the project set to be located in Raz Markaz in Duqm.
�[The] Raz Markaz project is one of the biggest projects that Oman Oil is studying for storage of crude and products,� Mr Jashmi told the Oman Observer. �This is going to be one of the largest in the world. We are planning to store about 200mn barrels [approximately 31.7mn cu ms] there,� he continued. A project manager has already been appointed, the undersecretary said, adding also that a review of potential marketing strategies was next on the ministry�s agenda.
Once complete, this project would represent OOC�s second storage terminal in Oman. The company�s first independent bulk liquid storage terminal was opened on 24 March 2009 at the Sohar Industrial Port on the Gulf of Oman in the north (MEES, 30 March 2009).
The Sohar terminal is 35% owned by Hamburg-based Oiltanking, 35% by Norwegian shipping company Odfjell, 25% by OOC, and 5% by Seven Seas Company of Oman; and is much smaller than the planned �Duqm terminal, with a total capacity of 848,500 cu ms (approximately 5.34mn barrels) of products and petrochemicals. Part of the capacity is allocated for the storage of aromatic compounds that would be produced by the Aromatics Oman petrochemicals complex within the port.
$8Bn Annual Oil And Gas Spend
In an interview earlier this year, Oman�s Minister of Oil and Gas Muhammad al-Rumhy suggested the ministry�s long-term targets for oil, condensate and gas production were focused largely on extending the life of the country�s producing fields as long as is technically viable. This would be done using �state-of-the-art technology,� to both ensure sustainability, and lower the cost of production.
The ministry has a long-term policy of safeguarding the longevity of production �through ensuring that the reserves replacement ratio is one or greater over the planning period, and by maintaining a rolling 10-year plateau,� the minister told The Oil and Gas Year. �New and more sophisticated exploration activity is another area that the Omani government continued to actively encourage and pursue,� he continued.
It comes as no surprise therefore that the country, Mr Jashmi said, has been spending between $7-8bn per year on investments in its oil and gas sector. Oman has in recent years launched an exploration drive in search of new and as yet untapped energy resources such as tight and unconventional gas found in deep and narrow reservoirs underground.
Shell-led Petroleum Development Oman (PDO), which has invested around $300mn in its five-year gas exploration program, including drilling one of the deepest wells in the Middle East (7,145ms), has outlined plans to develop difficult gas fields within its vast 114,000 sq km Block 6 concession by 2020-22.
MEES soundings indicate early drilling results have been encouraging thus far, while costs are on the wane, providing the opportunity to exploit valuable gas resources for use in thermal enhanced oil recovery. There is the belief in Oman that such difficult gas will soon provide a basis for further industrial development, as drilling and hydraulic fracturing (fraccing) costs begin to fall.�
Mr Jashmi said a number of gas exploration wells had been drilled by PDO this year, the results of which he believes will soon be made available. �Primary results of the new gas wells are promising,� he said. �They will be announced later, after they are studied.�
Copyright MEES 2012.
